Exclusive: Snap Plans Biggest Round of Layoffs Yet Totaling 120 Engineers

March 7, 2018
Updated 1mo ago

By Alex Heath

Snap Inc. is preparing its largest round of layoffs to date, Cheddar has learned.

The Snapchat-maker plans to announce the cuts internally in the next couple days, according to people familiar with the matter, who required anonymity to discuss confidential information. The layoffs will number 120 employees and account for roughly 10% of Snap’s engineering department.

Snap SVP of Engineering Jerry Hunter emailed employees to confirm the layoffs shortly after Cheddar first reported the news on Wednesday. The layoffs will affect 120 engineers, Hunter said in the email, a copy of which was obtained by Cheddar.

"I know this is a challenging moment, but I am convinced that this is an important step to help us build the future of Snap," Hunter wrote in the memo.

A Snap spokesperson also confirmed the layoffs when reached by Cheddar.

Despite affecting a fraction of one unit, the planned layoffs will be Snap's biggest to date. The company laid off a couple dozen across its hardware and recruiting divisions last year followed by roughly two dozen more cuts in January. Snap slowed its hiring rate by roughly 60% last quarter and reported having 3,069 employees at the end of 2017.

This third round of layoffs comes after Snap instituted a companywide system for evaluating employee performance towards the end of last year. CEO Evan Spiegel then told managers that they would be required to make “hard decisions” about evaluating their teams going into the 2018 calendar year.

"Having high-performing, technically excellent, and appropriately aligned teams will be critical to building both a compelling product and a compelling culture for engineers," Hunter said in his email to engineers confirming the latest round of layoffs on Wednesday. "We want to unleash speed and productivity in our organization, while keeping a high technical bar. That required us to think carefully about the shape of the organization, and where each member of our team fits."

Snap withheld cash bonuses for employees at the end of 2017 because of failure to meet companywide goals. CEO Spiegel received a $637 million stock award the same year for taking the company public — the third largest annual CEO payout in recent history.

Snap has suffered an exodus of top management since its initial public offering in early 2017, including its former SVP of Engineering Tim Sehn, General Counsel Chris Handman, VP of Sales Jeff Lucas, and VP of Product Tom Conrad.

You can read the full email sent by Snap's engineering chief Jerry Hunter to employees confirming the layoffs below:

"Team -

Over the last few weeks I've worked closely with our key leaders to create a plan for restructuring our team to make it stronger. We kept a few important goals in mind: 1) We will unify the entire engineering organization as a single, powerful and diverse team that is highly productive, extremely innovative, and technically excellent. 2) We will organize around our key priorities, specifically, addressing the technical debt that we have accrued over the years so that we can develop a product that engages customers and drives Snap forward. 3) We will deploy an organizational structure that aligns top talent with the most critical priorities, creates clarity around our mission, drives accountability, and rewards technical excellence in product development.

Having high-performing, technically excellent, and appropriately aligned teams will be critical to building both a compelling product and a compelling culture for engineers. We want to unleash speed and productivity in our organization, while keeping a high technical bar. That required us to think carefully about the shape of the organization, and where each member of our team fits. As part of this, we have made the exceptionally difficult decision to exit just over 120 members of our team from the company. We are doing this after a thoughtful and respectful review of each team member and with appreciation for the many contributions they have made to Snap. All impacted employees will be eligible for a transition package that includes resources to help them with the next step in their career.

Over the next few days all of you will learn more about your role in the organization. We will also have an All Hands on March 14 to cover the new organization in detail, talk about the mission of each new team, and address your questions face-to-face. We have important and challenging opportunities ahead of us and you have our commitment that we are investing in top talent and key priorities as a result of this action.

Thank you for your trust, patience, and flexibility. I know this is a challenging moment, but I am convinced that this is an important step to help us build the future of Snap. Please don’t hesitate to reach out to me with any questions.

Jerry"

This story was updated on March 8 with Snap's confirmation of the layoffs, the exact number of employees being laid off, and an email sent to employees from SVP of Engineering Jerry Hunter explaining the layoffs.